Market Intelligence Report
Farm & Estate Staff Salary Reviews 2014/15
The Agricultural Wages Board was abolished in England and Wales in 2013 (although the Welsh Government wants to retain it in Wales and has now defeated the UK Government twice over whether it has the powers to do so) and so one of the standards against which to judge staff salary reviews has gone. To understand how salaries are being reviewed for 2014/15, we polled Smiths Gore partners, who between them manage about 2 million acres on which around 17,000 staff work¹. There is a remarkable consistency in how salary reviews are being handled. • All respondents (100%) said that salaries were increasing in 2014/15. • The most common measures used as the basis for assessing salary reviews are: a. Using ‘inflation’, followed by b. National wage settlements, most notably National Minimum Wage and the Scottish Agricultural Wages Board, followed by c. Various other measures, such as ‘an increase’ and the ‘living wage’².
Measures used as the basis for assessing salary reviews 61% 45%
22%
40%
17%
15%
Using inflation as a guide
Using national wage settlements as a guide 2013
Various other measures 2014
1 Of 55 partners, 18 are involved in agreeing salary levels on behalf of clients, and these results are based on their responses. 2 The Living Wage is based on the basic cost of living in the UK, excluding London, which is currently 17.7% higher than the Adult National Minimum Wage. NB This does not mean that salaries will rise by 17.7%, as most farm and estate workers are already paid more than the minimum wage.
smithsgore.co.uk
• Just under half of the respondents had suggested a fixed percentage increase (across all staff grades), with the remaining 56% of respondents suggesting a range. • This is quite different to the approach taken in 2013, the first year without the Agricultural Wages Board, when 83% of respondents suggested a fixed percentage - it suggests that farms and estates are becoming more used to the new approach, and are rewarding efficiency and effort.
Anticipated change in farm and estate staff salaries 33%
22%
11% 6%
1.5
6%
2
2.5
1.5 - 2
6%
6%
6%
1.77 - 2.5
1-2
1-3
6%
2 - 2.5
2-3
% change in staff salaries
• Less than a third (27%) were offering lower than 2% increase. • Over half of respondents (56%) said that they were expecting salaries to rise by 2% or more. This is above national earnings inflation, which is around 1.3% for the whole economy, and above the ‘cost of living’ inflation, which is 1.5% (CPI). • 12% were offering up to a 3% increase. As we said last year, we will not fully understand how the sector has reacted to the abolition of the Agricultural Wages Board until after a few years. We don’t think it is in the in the interest of rural businesses to be parsimonious, as that is not the way to keep staff motivated and working well. By way of example, our shoot benchmarking survey found that profit-making shoots paid their keepers more than loss-making ones; the profit-making keepers had to look after more birds but they were incentivised to do so.
smithsgore.co.uk
Contacts If you would like to discuss staff salaries or other aspects of farm and estate management, please contact:
Smiths Gore offices
Scotland Toby Metcalfe t 0131 344 0885 e toby.metcalfe@smithsgore.co.uk
East Midlands and Yorkshire & Humber David Goodson t 01733 559306 e david.goodson@smithsgore.co.uk
North Philip Coles t 01325 370511 e philip.coles@smithsgore.co.uk
Western England and Wales Stephen Spencer t 01543 251221 e stephen.spencer@smithsgore.co.uk
South West Charles Dixon t 01392 294892 e charles.dixon@smithsgore.co.uk
South East and East of England Rupert Clark t 01798 345999 e rupert.clark@smithsgore.co.uk
To discuss farm management, please contact: Simon Blandford Head of Farm Management t 01962 857405 e simon.blanford@smithsgore.co.uk
smithsgore.co.uk smithsgore.co.uk